Procurement Manual
The Municipal Development and Lending Fund
MDLF
Part 1: GOODS, Works and Physical Services
Part 2: consultants and the procurement of consultancy services
Palestine
DECEMBER 2012
Preface
This manual has been prepared to be used by Palestinian Municipalities and the Municipal Development and Lending Fund (MDLF) for procuring goods, works, and consultancy services funded by the World Bank, AFD, Denmark, KFW, GIZ, BTC, and Sweden under the Municipal Development Program (MDP). The MDLF has prepared a detailed Project Operations Manual (POM) to be the guiding document for all MDP activities. This section of the POM, the procurement manual, outlines the MDP procurement arrangements to be carried out by the various implementing entities. Procurement under the MDP will be carried out in accordance with (i) for goods, works and non-consulting services: World Bank “Guidelines: Procurement of Goods, Works and Non-Consulting Services under IBRD Loans and IDA Credits and Grants” by World Bank Borrowers published by the World Bank in January 2011.
For consultants' services, World Bank “Guidelines: Selection and Employment of (ii) Consultants under IBRD Loans and IDA Credits and Grants by World Bank Borrowers” published by the World Bank in January 2011.
Following the procedures outlined in this Manual other donors agreed to follow the World Bank Guidelines for this program.
This Manual was revised in Octob+er 2011 to accommodate comments from the Funding Partners.
This Procurement Manual consists of in two parts.
Part 1: covers the procedural provisions of procuring goods, works, and physical services.
Part 2: covers the selection of consultants and the procurement of consultancy services.
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Contents: Part 1
1 Introduction 9
2 Definitions 10
3 The Municipal Development Program 14
3.1 MDP- Eligible Expenditures 14
3.2 Procurement of MDP components 15
3.2.1 Window 1: Procurement under the Municipal Grants for Capital Investment: 15
3.2.2 Procurement at Central Level (MDLF) - Level: windows 2-4 16
3.3 Thresholds for Procurement Methods and Prior Review 18
3.4 Documentation needed for prior Review 19
4 Responsibilities 22
4.1 MDLF Responsibilities 22
4.2 Municipalities’ Responsibilities 22
4.3 Local Technical Consultant’s Responsibility 23
4.4 Selecting the Procurement committees 24
5 Procurement Planning 28
5.1 Selection of Procurement methods and defining the procurement planning strategy 28
5.2 Preparation of Procurement Plan 29
5.3 Packaging of Procurement objects 29
5.4 Selection of Contract Type 30
6 Procurement of goods 33
6.1 Procurement Methods 33
6.2 National Competitive Bidding (NCB) Goods 34
6.2.1 Preparing the bidding documents 35
6.2.2 Advertising the bid 37
6.2.3 Receiving and opening bids 38
6.2.4 Evaluating the Bids 39
6.2.5 CLARIFICATION OF BIDS 41
6.2.6 Bid evaluation report 41
6.2.7 Negotiations and adjusting the scope of procurement 42
6.3 Request for Quotations Method (RFQ)/ Shopping of GOODs 43
6.3.1 Conditions for use 43
6.3.2 Documentation needed 43
6.3.3 Soliciting Quotations 44
6.3.4 Submission of Quotations 44
6.3.5 Evaluation of Quotations and Issuance of Purchase Order 45
6.4 Direct Contracts/Purchases 45
7 PROCUREMENT OF works and physical services 48
7.1 Procurement Methods 48
7.2 National Competitive Bidding (NCB) 49
7.2.1 Preparing the bidding documents 49
7.2.2 Advertising the bid 51
7.2.3 Receiving and opening bids 53
7.2.4 Evaluating the Bids 54
7.2.5 CLARIFICATION OF BIDS 56
7.2.6 Bid evaluation report 57
7.2.7 Negotiations and adjusting the scope of work 58
7.2.8 Securing no objection from the MDLF 59
7.3 Shopping for Works (RFQ) 60
7.3.1 Conditions for use 60
7.3.2 Documentation needed 60
7.3.3 Soliciting Quotations 61
7.3.4 Submission of Quotations 61
7.3.5 Evaluation of Quotations and Issuance of letter of award 62
7.4 Direct contracting 62
8 Concluding the procurement process 63
8.1 Contract Award 63
8.2 Rejection of all Bids or Quotations 64
8.3 Actions to be taken Following Rejection 65
9 Bid Validities and Security Deposits 66
9.1 Bid Validity 66
9.1.1 Determination of Validities 66
9.1.2 Extension of Validity 66
9.2 Bid Securities 66
9.2.1 Extension of Validity and Bid Security 67
9.2.2 Verification of the Authenticity of Bid Security 67
9.2.3 Forfeiture of Bid Security 67
9.2.4 Return of Bid Securities 68
9.3 Performance Security 68
10 Contract Administration and Management 69
10.1 General 69
10.2 Works Contract Administration and Management 70
10.2.1 Project management and Work Program 70
10.2.2 Completion date and work defects 71
10.2.3 Advance payment 71
10.2.4 Payments 72
10.2.5 Compensation events and liquidated damages 72
10.2.6 Project completion 73
10.3 Administration of Goods Contracts 74
11 Variation Orders 75
11.1 Issuance of Variation or Extra Work Orders 75
11.2 Preparation of a Variation or an Extra Work Order 75
11.3 Costing of Variation or Extra Work 76
12 COMPLAINTS AND APPEALS 78
12.1 Right to Complain 78
12.2 Submission of Complaints to the Administrative Authority, Disposal of AppealL 79
12.3 Formation of Review Panels 80
12.4 Suspension of Notification of Award 81
12.5 Disposal of Appeal by Review Panels 82
13 Maintaining Records of Procurement 83
14 Appendix 1 87
14.1 Total Procurement Plan (To be prepared by the MDLF) 87
14.2 Total Procurement Plan (To be prepared by the Municipality) 89
14.3 MDLF Procurement Plan 90
14.4 Municipal PROCUREMENT PLAN 91
15 Annexes 92
15.1 Annex 1– Sample Quotations Evaluation Report for shopping 93
15.2 Annex 2- Sample REQUEST FOR QUOTATIONs- Goods 100
15.3 Annex 3- Sample Request for Quotations- Minor Works 110
SECTION 3 - DRAWINGS 122
SECTION 5 –BILL OF QUANTITIES/PRICED ACTIVITY SCHEDULE 122
15.4 Annex 4 Special requirements of the KFW 128
Part 2 131
16 Introduction 132
16.1 Appointment of Consultants 134
16.2 The Procuring Entity 134
16.3 The Municipal Development and Lending Fund 134
17 Selection methods 136
17.1 Selection of firms 136
17.1.1 Quality & Cost Based Selection (QCBS) 136
17.1.2 Quality- Based Selection (QBS) 137
17.1.3 Least-Cost Selection (LCS) 138
17.1.4 Selection based on consultant Qualifications (CQS) 139
17.1.5 Single-Source Selection (SSS) 140
17.2 Selection of Individual Consultants 140
18 Contracts Types 144
19 The Selection Process 146
19.1 Preparation of the Terms of Reference (TOR) 146
19.2 Preparation of cost estimate and the budget 147
19.3 Obtaining Noobjection on the TOR from the FP 147
19.4 Advertising and Submission of Expressions of Interest (EOI) 148
19.5 Opening of Expressions of Interest 148
19.6 Evaluation of Expressions of Interest and Approval of Short-List 149
19.7 Preparation of the short list of consultants 149
19.8 Preparation and issuance of the Request for Proposal (for QCBS, LCS and QBS) 150
19.9 Submission and Receipt of proposals 154
19.10 Evaluation of Technical Proposals 155
19.11 Evaluation of financial proposals 157
19.12 Combined Evaluation of Technical Proposal and Financial Proposals - QCBS 158
19.13 Negotiations and Award of Contract 159
19.14 Failure of Negotiations and Rejection of All Proposals 163
20 Administration of Consultancy Services Contracts 164
21 Consultancy Services checklist 167
22 Annex A - Sample Request for Expressions of Interest Form 169
23 Annex B – Sample of Request for CV of Individual Consultant - IC 170
24 Annex C– Sample of CV format for IC 171
25 Annex D- Evaluation Report of Expressions of Interest 171
1. Published Request for Expressions of Interest (REOI) 174
2. List of Consultants Expressing Interest 174
3. The Evaluation Process 174
3.2 Evaluation criteria 174
4. Evaluation Criteria and Scores 176
5. Consultants’ Strengths and Weaknesses 176
6. Recommended Shortlist of consultants/consultant 177
26 Annex E – Sample of evaluation report for selection of IC 178
26.1 Section 6. Standard Forms of Contract 180
27 Annex F Small Assignments – Time-Based Payments 181
28 ANNEX G Small Assignments – Lump-Sum Payments 188
SAMPLE CONTRACT FOR Lump-Sum Payments 189
Sample of Terms Of References for Consultants 194
Consultant profile:______194
29 Annex H REQUEST FOR PROPOSAL-(Firms-CQS) 195
CONTENTS 196
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Tables
Table 2 How to select contracting methods 30
Table 3 Procurement methods for Goods and their applicability limits 32
Table 4 Guidance on selection of suppliers for Goods 37
Table 5 Procurement methods for Works and their applicability limits 47
Table 6 Contractor classification matrix for works 51
Table 7 Thresholds for Consultants’ Selection Methods and Prior review by the donor/World Bank 142
Table 8 Consultants selection methods and their applicability limits 143
Table 9 Correlation between Type of Assignment, Selection Method, and Type of Contract 145
Table 10 Allocation of Points to Main Criteria for different types of assignments 154
Table 11 Combined Technical and Financial Evaluation 159
Table 12 Consultant Conflicts of Interest: Range of Possible Cases 166
Table 13 Checklist– Consultancy firm minimum requirements for services contracts 167
Figures
Figure 1. The Procurement process as it is conducted by the MUNICIPALITY and controlled by MDLF 20
Figure 2 illustrates the negotiation process………………………………………………154
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Abbreviations
The following Abbreviations are used throughout this document:
AFD / Agence Francaise pour DeveloppementBEC / Bid Evaluation Committee
BOS / Bid opening sheet
CQS / Selection Based on Consultant Qualification
EMSP / Emergency Municipal Services Program
EMSRP / Emergency Municipal Services Rehabilitation Program
FA / Force Account
FBS / Selection under a Fixed Budget
FP / Funding Partners
GIA / Grant Implementation Agreement
GIZ / German Technical Cooperation
ICB / International Competitive Bidding
ITB / Instructions to Bidders
ITC / Instructions to Consultants
KfW / Kreditanstalt für Wiederaufbau (German Bank for Development)
LCS / Least- Cost Selection
LGCBP / Local Government Capacity Building Project
LOI / Letter of Invitation
LTC / Local Technical Consultant
MDLF / Municipal Development and Lending Fund of Palestine
MDP / Municipal Development Program
MoLG / Ministry of Local Government
NCB / National Competitive Bidding
NOA / Notification of Award
PLC / Palestine Legislative Council
PM / Procurement Manual
PNA / Palestinian National Authority
PO / Procurement Officials
PPM / Procurement Planning Milestone
PPP / Project Procurement Plan
QCBS / Quality & Cost Based Selection
QBS / Quality- Based Selection
RFP / Request for Proposals
RFQ / Request for Quotations
SBD / Standard Bid Documents
SSS / Single-Source Selection
TFGWB / Trust Fund Gaza West Bank
TOR / Terms of Reference
UNDB / United Nation Development Business
WB / World Bank
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1 Introduction
This Manual has been created to establish the procedures to be followed and the matters incidental thereto; and is intended to provide straightforward, but detailed guidance on the individual stages of the procurement process to be followed when conducting procurement for projects funded under the Municipal Development Project.
The manual is designed to be simple to use, by breaking the overall procurement process down into a series of individual stages. This has been done to:
a) provide working procedures to implement procurement in accordance with the agreements between the Palestinian National Authority and the donors, while complying with the basic legal requirement in the Palestinian territories;
b) promote efficiency, economy and the attainment of value for money while promoting transparency and accountability in public procurement;
c) provide uniform procedures for application by all implementing agencies;
d) ensure equal treatment, and free and fair competition among all Persons wishing to participate in such Procurement; and
e) provide standard procedures, against which procurement activities can be monitored, reported and audited.
2 Definitions
In this Manual, unless there is anything contrary to the subject or context-
(1) "Adjudicator" is the expert appointed jointly by the Procuring Entity and the Contractor, Supplier or Consultant to resolve disputes in the first instance;
(2) "Advertisement" means an advertisement published in newspapers, websites or any other mass media for the purposes of wide publicity;
(3) "Applicant" means a Person who seeks be short-listed in response to a request for Expression of Interest;
(4) "Approval Procedures" means the approval procedures of a Bid, Request for Quotations or a Proposal;
(5) "Approving Authority" means the authority which, in accordance with the Delegation of Financial Powers, approves the award of contract for the Procurement of Goods, Works or Services;
(6) "Bid or Proposal", depending on the context, means a Bid or a Proposal submitted by a Bidder or a Consultant for delivery of Goods, Works or Services to a Procuring Entity in response to an Invitation for Bid or a Request for Proposal; and for the purposes of this Manual, Bid also includes quotation;
(7) "Bid Document or Request for Proposal Document",means the Document provided by a Procuring Entity to a Bidder or a Consultant as a basis for preparation of its Bid or Proposal;
(8) "Bidder" means a Person who submits a Bid
(9) "Code of Ethics" means the set of conditions and provisions which a Person shall abide while participating in public Procurement;
(10) "Completion Date" is the date of completion of the Works as certified by the Project Manager;
(11) "Conflict of Interest" means any situation where personal or business interests of any Person in a public Procurement transaction would adversely affect the interest of a Procuring Entity in achieving economy, efficiency, transparency, fairness and equal treatment of Bids or Proposals;
(12) "Consultant" means a Person under contract with a Procuring Entity for providing intellectual and professional services;
(13) "Contractor" means a Person under contract with a Procuring Entity for the execution of any Works;
(14) "Contract Price" is the price stated in the Notification of Award and thereafter as adjusted in accordance with the provisions of the Contract;
(15) “Contracting Officer” is either the MUNICIPALITY technical staff or the outside consultant who is responsible of preparing the bid package and technical documentation;
(16) "Days" means calendar days unless otherwise specified as working days;
(17) "Dayworks" means work carried out following the instructions of the Procuring Entity or the authorized project manager and is paid for on the basis of time spent by the Contractor’s workers and equipment at the rates specified in the Bill of Quantities (BOQ), in addition to payments for associated Materials and Plant;